Fixed Odds Betting Terminal Decision Delayed?
Media claims there is government dissent on maximum stake
The Daily Mail, which has waged a determined war on Fixed Odds Betting Terminals in High Street betting shops, claimed over the weekend that the decision on reducing the maximum stake, and by how much, has been delayed until after the local elections at the start of May due to disagreement at the top levels of government.
The decision was expected this week, but sources have advised the newspaper that there is resistance to chopping the maximum stake too far due to the impact this would have on the government’s tax harvest.
“Whitehall sources” told the Mail that Chancellor Philip Hammond was responsible for the hold-up.
“The Chancellor is refusing to sign off cutting the stake to GBP2 for fear it could lose hundreds of millions in gambling tax revenues,” the Mail reports.
The newspaper revealed last week that Tory rebels are threatening to vote against allowing any maximum stake higher than GBP 5. The Treasury harvested GBP 500 million from the machines last year as players lost a combined GBP 1.7 billion, the Mail reported..
Gambling Group Shares Dip On FOBT Fears
Media reports that UK Chancellor is prepared to accept drastic cut in stakes
Gambling company shares took a beating Tuesday morning following media reports that the UK government, and specifically the Chancellor Phillip Hammond, is prepared to accept a drastic cut to GBP 2 on Fixed Odds Betting Terminal maximum stakes.
Over the weekend media reports indicated that the government would delay the FOBT decision until after next week’s local elections (see previous InfoPowa report) but on Monday several news outlets claiming informed sources in the Department for Digital, Culture, Media and Sport reported that Hammond was prepared to agree to the cut in stakes despite the impact it will have on government tax revenue.
The reports said that Hammond may make up the deficit by increasing tax levels on other forms of gambling.
The government is constrained by election rules from making an official announcement on the issue until after the local elections, The Times observed.
Davy Research has predicted that a GBP 2 limit would reduce the EBITDA of William Hill by 25 percent, of GVC by 18 percent and of Paddy Power Betfair by 3 percent, and if the Chancellor decides to recoup FOBT tax losses by ratcheting up online taxes, further negative impact could result.